NASHVILLE, Tenn., July 29, 2021 /PRNewswire/
-- AllianceBernstein L.P. ("AB") and AllianceBernstein Holding
L.P. ("AB Holding") (NYSE: AB) today reported financial and
operating results for the quarter ended June 30, 2021.
"We continue to drive consistent organic growth across our
diversified global platform," said Seth P.
Bernstein, President and CEO of AllianceBernstein. "Active
net inflows were $6.7 billion, or 4%
annualized organic growth, including both the final quarter of
planned AXA redemptions and outflows from the Venerable
transaction. Once again all three client channels grew, driven by
double-digit annualized organic growth in active equities
(including ESG), tax-aware passive equities, municipals,
alternatives and multi-asset. Our investment teams continued to
deliver both improved near- and long-term performance, with
two-thirds or more of fixed income and equity assets outperforming
on a 3- and 5-year basis. On a year-over-year basis, our adjusted
operating margin of 31.7% expanded by 380 basis points, and
adjusted earnings per unit and distributions to Unitholders
increased by 49%."
(US $ Thousands
except per Unit amounts)
|
2Q
2021
|
|
2Q
2020
|
|
%
Change
|
|
1Q
2021
|
|
%
Change
|
U.S. GAAP Financial
Measures
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
|
1,076,822
|
|
|
$
|
871,449
|
|
|
23.6
|
%
|
|
$
|
1,007,266
|
|
|
6.9
|
%
|
Operating
income
|
$
|
283,623
|
|
|
$
|
209,647
|
|
|
35.3
|
%
|
|
$
|
260,584
|
|
|
8.8
|
%
|
Operating
margin
|
26.0
|
%
|
|
21.7
|
%
|
|
430 bps
|
|
25.9
|
%
|
|
10 bps
|
AB Holding Diluted
EPU
|
$
|
0.91
|
|
|
$
|
0.59
|
|
|
54.2
|
%
|
|
$
|
0.81
|
|
|
12.3
|
%
|
|
|
|
|
|
|
|
|
|
|
Adjusted Financial
Measures (1)
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
$
|
881,635
|
|
|
$
|
698,725
|
|
|
26.2
|
%
|
|
$
|
819,978
|
|
|
7.5
|
%
|
Operating
income
|
$
|
279,171
|
|
|
$
|
195,013
|
|
|
43.2
|
%
|
|
$
|
260,061
|
|
|
7.3
|
%
|
Operating
margin
|
31.7
|
%
|
|
27.9
|
%
|
|
380 bps
|
|
31.7
|
%
|
|
—
|
AB Holding Diluted
EPU
|
$
|
0.91
|
|
|
$
|
0.61
|
|
|
49.2
|
%
|
|
$
|
0.81
|
|
|
12.3
|
%
|
AB Holding cash
distribution per Unit
|
$
|
0.91
|
|
|
$
|
0.61
|
|
|
49.2
|
%
|
|
$
|
0.81
|
|
|
12.3
|
%
|
|
|
|
|
|
|
|
|
|
|
(US $
Billions)
|
|
|
|
|
|
|
|
|
|
Assets Under
Management ("AUM")
|
|
|
|
|
|
|
|
|
|
Ending AUM
|
$
|
738.4
|
|
|
$
|
600.0
|
|
|
23.1
|
%
|
|
$
|
697.2
|
|
|
5.9
|
%
|
Average
AUM
|
$
|
722.6
|
|
|
$
|
578.5
|
|
|
24.9
|
%
|
|
$
|
688.5
|
|
|
5.0
|
%
|
(1) The adjusted financial measures
represent non-GAAP financial measures. See page 12 for
reconciliations of GAAP Financial Results to Adjusted Financial
Results and pages 13-14 for notes describing the
adjustments.
|
Bernstein continued, "Retail channel gross sales were the second
strongest ever, with net inflows of $5.2B, or 8% organic growth driven by 18% growth
in active equity services, positive for the 17th straight quarter,
and 23% organic growth in municipals. Positive net flows in
Institutional were led by multi-asset and active equity, while our
record institutional pipeline of $17.8
billion reflected strong multi-asset (CRS) sales, and an
annualized fee base of over $50
million. Private Wealth grew modestly sequentially, while
Bernstein Research revenues slowed as global market volatility
moderated from heightened levels a year ago."
Bernstein concluded, "Global markets remained constructive,
posting strong returns for the second quarter and on a
year-over-year basis, and we experienced strong client demand for
our differentiated offerings globally. Looking forward, we continue
to invest in long-term growth opportunities while managing costs
prudently, recognizing that our clients' success requires
increasingly sophisticated and innovative offerings. Across AB, our
talented teams remain fully invested in helping our clients reach
their financial goals."
The firm's cash distribution per Unit of $0.91 is payable on August 19, 2021, to
holders of record of AB Holding Units at the close of business on
August 9, 2021.
Market Performance
U.S. and global equity and fixed income markets increased during
the second quarter of 2021.
|
|
S&P 500 Total
Return
|
8.6
|
%
|
MSCI EAFE Total
Return
|
5.4
|
|
Bloomberg Barclays US
Aggregate Return
|
1.8
|
|
Bloomberg Barclays
Global Aggregate ex US Index Return
|
0.9
|
|
Bloomberg Barclays
Global High Yield Index
|
3.1
|
|
Bloomberg Barclays
U.S. Corporate High Yield Index
|
2.7
|
|
Assets Under Management
($ Billions)
Total assets under management as of June 30, 2021 were
$738.4 billion, up $41.2 billion, or 6%, from March 31, 2021
and up $138.4 billion, or 23%, from
June 30, 2020.
|
|
Institutional
|
|
Retail
|
|
Private
Wealth
Management
|
|
Total
|
Assets Under
Management 6/30/2021
|
|
$329.1
|
|
$293.7
|
|
$115.6
|
|
$738.4
|
Net Flows for Three
Months Ended 6/30/2021:
|
|
|
|
|
|
|
|
|
Active
|
|
$2.3
|
|
$4.8
|
|
$(0.4)
|
|
$6.7
|
Passive
|
|
(1.4)
|
|
0.4
|
|
0.5
|
|
(0.5)
|
Total
|
|
$0.9
|
|
$5.2
|
|
$0.1
|
|
$6.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net inflows were $6.2
billion in the second quarter, compared to net inflows of
$5.2 billion in the first quarter of
2021, and net outflows of $3.3
billion in the prior year second quarter. AXA redemptions of
low-fee fixed income mandates and net flows excluding these
redemptions were as follows:
|
2Q
2021
|
|
2Q
2020
|
|
1Q
2021
|
|
(in
billions)
|
AXA
redemptions
|
$1.3
|
|
$7.9
|
|
$—
|
Net Inflows excluding
AXA redemptions
|
$7.5
|
|
$4.6
|
|
$5.2
|
Institutional channel second quarter net inflows of $0.9 billion compared to net inflows of
$0.8 billion in the first quarter of
2021. Institutional gross sales of $17.6
billion increased sequentially from $4.9 billion. Additionally, AB experienced
$8.7 billion in sales and
$10.0 billion in redemptions
associated with Equitable Holding's sale to Venerable Holdings of
its legacy variable annuity assets, for which AB remained the
preferred investment manager. Our ending Institutional channel AUM
reflects $1.3 billion in net outflows
as a result of this transaction. The pipeline of awarded but
unfunded Institutional mandates increased sequentially to
$17.8 billion at June 30, 2021
from $15.2 billion at March 31,
2021.
Retail channel second quarter net inflows of $5.2 billion compared to net inflows of
$2.7 billion in the first quarter of
2021, driven primarily by active equity net inflows of $5.2 billion. Retail gross sales of $23.8 billion increased sequentially from
$23.0 billion.
Private Wealth channel second quarter net inflows of
$0.1 billion compared to net inflows
of $1.7 billion in the first quarter
of 2021. Private Wealth gross sales of $3.6
billion decreased sequentially from $5.4 billion.
Our ending AUM at June 30, 2021, of which 2.8% remains
investments by AXA, reflects $13.1
billion in outflows resulting from AXA S.A's redemption of
certain low-fee fixed income mandates, including redemptions of
$11.8 billion in 2020 and
$1.3 billion during the six months
ended June 30, 2021. These redemptions, which began in the
first quarter of 2020, are now essentially complete. Additional
redemptions in future periods are possible and would be at the
complete discretion of AXA.
Second Quarter Financial Results
We are presenting both earnings information derived in
accordance with accounting principles generally accepted in
the United States of America ("US
GAAP") and non-GAAP, adjusted earnings information in this release.
Management principally uses these non-GAAP financial measures in
evaluating performance because we believe they present a clearer
picture of our operating performance and allow management to see
long-term trends without the distortion caused by long-term
incentive compensation-related mark-to-market adjustments, real
estate charges/credits and other adjustment items. Similarly, we
believe that non-GAAP earnings information helps investors better
understand the underlying trends in our results and, accordingly,
provides a valuable perspective for investors. Please note,
however, that these non-GAAP measures are provided in addition to,
and not as a substitute for, any measures derived in accordance
with US GAAP and they may not be comparable to non-GAAP measures
presented by other companies. Management uses both US GAAP and
non-GAAP measures in evaluating our financial performance. The
non-GAAP measures alone may pose limitations because they do not
include all of our revenues and expenses.
AB Holding is required to distribute all of its Available Cash
Flow, as defined in the AB Holding Partnership Agreement, to its
Unitholders (including the General Partner). Available Cash Flow
typically is the adjusted diluted net income per unit for the
quarter multiplied by the number of units outstanding at the end of
the quarter. Management anticipates that Available Cash Flow will
continue to be based on adjusted diluted net income per unit,
unless management determines, with concurrence of the Board of
Directors, that one or more adjustments made to adjusted net income
should not be made with respect to the Available Cash Flow
calculation.
US GAAP Earnings
Revenues
Second quarter net revenues of $1.1
billion increased 24% from $871
million in the second quarter of 2020. Higher investment
advisory base fees, performance-based fees and distribution
revenues were partially offset by lower investment gains and
Bernstein Research revenues.
Sequentially, net revenues of $1.1
billion increased 6.9% from $1.0
billion. Higher performance-based fees, investment advisory
base fees, distribution revenues and investment gains were
partially offset by lower Bernstein Research revenues.
Second quarter Bernstein Research revenues of $106 million decreased 7% compared to the prior
year second quarter and decreased 11% sequentially. The decrease
from the prior year second quarter was due to reduced customer
trading activity driven by decreased market volatility, as compared
to the significant COVID-related surge in trading volume
experienced during the second quarter of 2020. The sequential
decrease was due to decreased customer trading activity.
Expenses
Second quarter operating expenses of $793
million increased 20% from $662
million in the second quarter of 2020. Higher total employee
compensation and benefits expense, promotion and servicing expenses
and general and administrative ("G&A") expense were partially
offset by lower amortization of intangibles. Employee compensation
and benefits expense increased due to higher incentive
compensation, base compensation, commissions and fringes. Promotion
and servicing expenses increased due to higher distribution related
payments, transfer fees, marketing expenses, amortization of
deferred sales commissions and travel and entertainment, offset by
lower trade execution costs. During the second quarter ended
June 30, 2020, we experienced cost
savings in travel and entertainment and marketing expense primarily
driven by COVID-19. These expense items have since increased as
business activity has started to normalize, and we expect business
activity, and these expenses, to continue to normalize in the
second half of 2021 and future periods, subject to the extent to
which COVID-19 continues to impact markets and our business. Within
G&A, the increase was driven by higher portfolio servicing
fees, errors, higher professional fees and an unfavorable foreign
exchange translation impact, partially offset by lower
office-related expense.
Sequentially, operating expenses increased 6% from $747 million, primarily driven by higher total
employee compensation and benefits expense, G&A expense and
promotion and servicing expenses. Employee compensation and
benefits expense increased due to higher incentive compensation and
base compensation, partially offset by lower commissions and
fringes. Within G&A, the increase was driven by higher
portfolio servicing fees, professional fees, errors, technology and
office-related expenses. Promotion and servicing expenses increased
due to higher distribution related payments, marketing expenses and
transfer fees, partially offset by lower trade execution costs.
Operating Income, Margin and Net Income Per Unit
Second quarter operating income of $284
million increased 35% from $210
million in the second quarter of 2020 and the operating
margin of 26.0% in the second quarter of 2021 increased 430 basis
points from 21.7% in the second quarter of 2020.
Sequentially, operating income increased 9% from $261 million in the first quarter of 2021 and the
operating margin of 26.0% increased 10 basis points from 25.9% in
the first quarter of 2021.
Second quarter diluted net income per Unit was $0.91 compared to $0.59 in the second quarter of 2020 and
$0.81 in the first quarter of
2021.
Non-GAAP Earnings
This section discusses our second quarter 2021 non-GAAP
financial results, compared to the second quarter of 2020 and the
first quarter of 2021. The phrases "adjusted net revenues",
"adjusted operating expenses", "adjusted operating income",
"adjusted operating margin" and "adjusted diluted net income per
Unit" are used in the following earnings discussion to identify
non-GAAP information.
Revenues
Second quarter adjusted net revenues of $882 million increased 26% from $699 million in the second quarter of 2020.
Higher investment advisory base fees and performance-based fees
were partially offset by lower Bernstein Research revenues and
lower investment gains.
Sequentially, adjusted net revenues increased 8% from
$820 million. Higher
performance-based fees and investment advisory base fees were
partially offset by lower Bernstein Research revenue and lower
investment gains.
Expenses
Second quarter adjusted operating expenses of $602 million increased 20% from $504 million in the second quarter of 2020.
Higher total employee compensation and benefits, G&A expense
and promotion and servicing expenses were partially offset by lower
amortization of intangibles. Employee compensation and benefits
expense increased due to higher incentive compensation, base
compensation, commissions and fringes driven by higher revenue.
Within G&A, the increase was driven by higher portfolio
servicing fees, professional fees, errors, office-related expense
and an unfavorable foreign exchange translation impact. Promotion
and servicing expenses increased due to higher transfer fees,
marketing expense, and travel and entertainment expense, offset by
lower trade execution costs. The increase in travel and
entertainment and marketing expense is primarily a result of cost
savings associated with the COVID-19 pandemic experienced during
2020. We expect these costs to continue to increase in the second
half of 2021 and further normalize in 2022, as the
pandemic recedes.
Sequentially, adjusted operating expenses increased 8% from
$560 million. Total employee
compensation and benefits expense, G&A expenses and promotion
and servicing were all higher. Employee compensation and benefits
expense increased due to higher incentive compensation and base
compensation, partially offset by lower commissions and fringes.
Within G&A, the increase is attributable to higher professional
fees, portfolio servicing fees, errors, technology and
office-related expenses. Within promotion and servicing expenses,
the increase was driven by higher marketing expense and transfer
fees, partially offset by lower trade execution costs.
Operating Income, Margin and Net Income Per Unit
Second quarter adjusted operating income of $279 million increased 43% from $195 million in the second quarter of 2020, and
the adjusted operating margin of 31.7% increased 380 basis points
from 27.9%.
Sequentially, adjusted operating income of $279 million increased 7% from $260 million and the adjusted operating margin of
31.7% in the second quarter of 2021 remained the same.
Second quarter adjusted diluted net income per Unit was
$0.91 compared to $0.61 in the second quarter of 2020 and
$0.81 in the first quarter of
2021.
Headcount
As of June 30, 2021, we had 4,005 employees, compared to
3,825 employees as of June 30, 2020 and 3,920 as of
March 31, 2021.
Unit Repurchases
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
(in
millions)
|
Total amount of AB
Holding Units Purchased (1)
|
|
0.9
|
|
|
1.3
|
|
|
1.9
|
|
|
2.2
|
|
Total Cash Paid for
AB Holding Units Purchased (1)
|
|
$
|
38.3
|
|
|
$
|
27.8
|
|
|
$
|
75.7
|
|
|
$
|
47.6
|
|
Open Market Purchases
of AB Holding Units Purchased (2)
|
|
0.8
|
|
|
1.3
|
|
|
1.4
|
|
|
2.2
|
|
Total Cash Paid for
Open Market Purchases of AB Holding Units (2)
|
|
$
|
34.6
|
|
|
$
|
27.8
|
|
|
$
|
58.8
|
|
|
$
|
45.1
|
|
(1)
Purchased on a trade date basis.
|
(2)
The remainder related to purchases of AB Holding Units from
employees to fulfill statutory tax withholding requirements at the
time of delivery of long-term incentive compensation
awards.
|
Second Quarter 2021 Earnings Conference Call
Information
Management will review Second Quarter 2021 financial and
operating results during a conference call beginning at
9:30 a.m. (EDT) on Thursday,
July 29, 2021. The conference call will be hosted by
Seth P. Bernstein, President and
Chief Executive Officer, Ali Dibadj,
Chief Financial Officer and Head of Strategy and Catherine Burke, Chief Operating Officer.
Parties may access the conference call by either webcast or
telephone:
- To listen by webcast, please visit AB's Investor Relations
website at http://alliancebernstein.com/investorrelations at
least 15 minutes prior to the call to download and install any
necessary audio software.
- To listen by telephone, please dial (833) 495-0952 in the U.S.
or (409) 216-0498 outside the U.S. 10 minutes before the scheduled
start time. The conference ID# is 6791746.
The presentation management will review during the conference
call will be available on AB's Investor Relations website shortly
after the release of Second Quarter 2021 financial and
operating results on July 29, 2021.
A replay of the webcast will be made available beginning
approximately one hour after the conclusion of the conference call
and will be available on AB's website for one week. An audio replay
of the conference call will also be available for one week. To
access the audio replay, please call (855) 859-2056 in the US,
or (404) 537-3406 outside the US, and provide the conference
ID #: 6791746.
Cautions Regarding Forward-Looking Statements
Certain statements provided by management in this news release
are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements are subject to risks, uncertainties and other factors
that could cause actual results to differ materially from future
results expressed or implied by such forward-looking statements.
The most significant of these factors include, but are not limited
to, the following: the performance of financial markets, the
investment performance of sponsored investment products and
separately-managed accounts, general economic conditions, industry
trends, future acquisitions, integration of acquired companies,
competitive conditions, and government regulations, including
changes in tax regulations and rates and the manner in which the
earnings of publicly-traded partnerships are taxed. AB cautions
readers to carefully consider such factors. Further, such
forward-looking statements speak only as of the date on which such
statements are made; AB undertakes no obligation to update any
forward-looking statements to reflect events or circumstances after
the date of such statements. For further information regarding
these forward-looking statements and the factors that could cause
actual results to differ, see "Risk Factors" and "Cautions
Regarding Forward-Looking Statements" in AB's Form 10-K for the
year ended December 31, 2020 and subsequent Forms 10-Q. Any or
all of the forward-looking statements made in this news release,
Form 10-K, Forms 10-Q, other documents AB files with or furnishes
to the SEC, and any other public statements issued by AB, may turn
out to be wrong. It is important to remember that other factors
besides those listed in "Risk Factors" and "Cautions Regarding
Forward-Looking Statements", and those listed below, could also
adversely affect AB's revenues, financial condition, results of
operations and business prospects.
The forward-looking statements referred to in the preceding
paragraph include statements regarding:
- The pipeline of new institutional mandates not yet
funded: Before they are funded, institutional mandates do
not represent legally binding commitments to fund and, accordingly,
the possibility exists that not all mandates will be funded in the
amounts and at the times currently anticipated, or that mandates
ultimately will not be funded.
- The possibility that AB will engage in open market
purchases of AB Holding Units to help fund anticipated obligations
under our incentive compensation award program: The number
of AB Holding Units AB may decide to buy in future periods, if any,
to help fund incentive compensation awards depends on various
factors, some of which are beyond our control, including the
fluctuation in the price of an AB Holding Unit (NYSE: AB) and the
availability of cash to make these purchases.
Qualified Tax Notice
This announcement is intended to be a qualified notice under
Treasury Regulation §1.1446-4(b)(4). Please note that 100% of AB
Holding's distributions to foreign investors is attributable to
income that is effectively connected with a United States trade or business. Accordingly,
AB Holding's distributions to foreign investors are subject to
federal income tax withholding at the highest applicable tax rate,
37% effective January 1, 2018.
About AllianceBernstein
AllianceBernstein is a leading global investment management firm
that offers high-quality research and diversified investment
services to institutional investors, individuals and private wealth
clients in major world markets.
As of June 30, 2021, including both the general partnership
and limited partnership interests in AllianceBernstein,
AllianceBernstein Holding owned approximately 36.3% of
AllianceBernstein and Equitable Holdings ("EQH"), directly and
through various subsidiaries, owned an approximate 64.4% economic
interest in AllianceBernstein.
Additional information about AllianceBernstein may be found on
our website, www.alliancebernstein.com.
AB (The Operating
Partnership)
|
|
|
|
|
|
|
|
|
|
US GAAP
Consolidated Statement of Income (Unaudited)
|
|
|
|
|
|
|
|
|
|
(US $
Thousands)
|
2Q
2021
|
|
2Q
2020
|
|
%
Change
|
|
1Q
2021
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
GAAP
revenues:
|
|
|
|
|
|
|
|
|
|
Base fees
|
$
|
723,717
|
|
|
$
|
569,296
|
|
|
27.1%
|
|
$
|
687,691
|
|
|
5.2%
|
Performance
fees
|
53,907
|
|
|
8,907
|
|
|
n/m
|
|
15,775
|
|
|
n/m
|
Bernstein research
services
|
105,655
|
|
|
113,609
|
|
|
(7.0)
|
|
119,021
|
|
|
(11.2)
|
Distribution
revenues
|
155,538
|
|
|
120,099
|
|
|
29.5
|
|
147,600
|
|
|
5.4
|
Dividends and
interest
|
8,658
|
|
|
12,692
|
|
|
(31.8)
|
|
8,684
|
|
|
(0.3)
|
Investments
gains
|
4,181
|
|
|
24,189
|
|
|
(82.7)
|
|
1,928
|
|
|
116.9
|
Other
revenues
|
25,900
|
|
|
26,092
|
|
|
(0.7)
|
|
27,711
|
|
|
(6.5)
|
Total
revenues
|
1,077,556
|
|
|
874,884
|
|
|
23.2
|
|
1,008,410
|
|
|
6.9
|
Less: interest
expense
|
734
|
|
|
3,435
|
|
|
(78.6)
|
|
1,144
|
|
|
(35.8)
|
Total net
revenues
|
1,076,822
|
|
|
871,449
|
|
|
23.6
|
|
1,007,266
|
|
|
6.9
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
expenses:
|
|
|
|
|
|
|
|
|
|
Employee compensation
and benefits
|
435,707
|
|
|
349,638
|
|
|
24.6
|
|
406,059
|
|
|
7.3
|
Promotion and
servicing
|
|
|
|
|
|
|
|
|
|
Distribution-related payments
|
167,761
|
|
|
125,678
|
|
|
33.5
|
|
162,254
|
|
|
3.4
|
Amortization of
deferred sales commissions
|
8,236
|
|
|
6,622
|
|
|
24.4
|
|
7,899
|
|
|
4.3
|
Trade execution,
marketing, T&E and other
|
46,571
|
|
|
44,288
|
|
|
5.2
|
|
46,678
|
|
|
(0.2)
|
General and
administrative
|
|
|
|
|
|
|
|
|
|
General and
administrative
|
131,324
|
|
|
121,424
|
|
|
8.2
|
|
120,223
|
|
|
9.2
|
Real estate
charges
|
—
|
|
|
5.526
|
|
|
(100.0)
|
|
—
|
|
|
—
|
Contingent payment
arrangements
|
838
|
|
|
807
|
|
|
3.8
|
|
796
|
|
|
5.3
|
Interest on
borrowings
|
1,241
|
|
|
1,096
|
|
|
13.2
|
|
1,294
|
|
|
(4.1)
|
Amortization of
intangible assets
|
1,521
|
|
|
6,723
|
|
|
(77.4)
|
|
1,479
|
|
|
2.8
|
Total operating
expenses
|
793,199
|
|
|
661,802
|
|
|
19.9
|
|
746,682
|
|
|
6.2
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
283,623
|
|
|
209,647
|
|
|
35.3
|
|
260,584
|
|
|
8.8
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
12,480
|
|
|
11,386
|
|
|
9.6
|
|
16,745
|
|
|
(25.5)
|
|
|
|
|
|
|
|
|
|
|
Net income
|
271,143
|
|
|
198,261
|
|
|
36.8
|
|
243,839
|
|
|
11.2
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) of
consolidated entities
attributable to non-controlling interests
|
3,573
|
|
|
20,940
|
|
|
(82.9)
|
|
(292)
|
|
|
n/m
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to AB Unitholders
|
$
|
267,570
|
|
|
$
|
177,321
|
|
|
50.9
|
|
$
|
244,131
|
|
|
9.6
|
|
|
|
|
|
|
|
|
|
|
AB Holding L.P.
(The Publicly-Traded Partnership)
|
|
|
|
|
|
|
|
|
SUMMARY STATEMENTS
OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(US $
Thousands)
|
2Q
2021
|
|
2Q
2020
|
|
%
Change
|
|
1Q
2021
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
Equity in Net Income
Attributable to AB Unitholders
|
$
|
97,407
|
|
|
$
|
63,201
|
|
|
54.1
|
%
|
|
$
|
88,907
|
|
|
9.6
|
%
|
Income
Taxes
|
6,490
|
|
|
6,275
|
|
|
3.4
|
|
|
7,820
|
|
|
(17.0)
|
|
Net
Income
|
90,917
|
|
|
56,926
|
|
|
59.7
|
|
|
81,087
|
|
|
12.1
|
|
|
|
|
|
|
|
|
|
|
|
Additional Equity in
Earnings of Operating Partnership (1)
|
8
|
|
|
3
|
|
|
166.7
|
%
|
|
18
|
|
|
(55.6)
|
%
|
Net Income -
Diluted
|
$
|
90,925
|
|
|
$
|
56,929
|
|
|
59.7
|
|
|
$
|
81,105
|
|
|
12.1
|
|
Diluted Net Income
per Unit
|
$
|
0.91
|
|
|
$
|
0.59
|
|
|
54.2
|
|
|
$
|
0.81
|
|
|
12.3
|
|
Distribution per
Unit
|
$
|
0.91
|
|
|
$
|
0.61
|
|
|
49.2
|
|
|
$
|
0.81
|
|
|
12.3
|
|
|
|
|
|
|
|
|
|
|
|
(1) To
reflect higher ownership in the Operating Partnership resulting
from application of the treasury stock method to outstanding
options.
|
|
Units
Outstanding
|
2Q
2021
|
|
2Q
2020
|
|
%
Change
|
|
1Q
2021
|
|
%
Change
|
AB L.P.
|
|
|
|
|
|
|
|
|
|
Period-end
|
271,994,122
|
|
|
268,620,187
|
|
|
1.3
|
%
|
|
272,675,165
|
|
|
(0.2)
|
%
|
Weighted average -
basic
|
272,344,036
|
|
|
269,080,676
|
|
|
1.2
|
%
|
|
272,332,476
|
|
|
—
|
|
Weighted average -
diluted
|
272,356,270
|
|
|
269,090,125
|
|
|
1.2
|
%
|
|
272,364,281
|
|
|
—
|
|
AB Holding
L.P.
|
|
|
|
|
|
|
|
|
|
Period-end
|
99,808,806
|
|
|
96,431,971
|
|
|
3.5
|
%
|
|
100,489,849
|
|
|
(0.7)
|
%
|
Weighted average -
basic
|
100,158,720
|
|
|
96,892,460
|
|
|
3.4
|
%
|
|
100,145,962
|
|
|
—
|
|
Weighted average -
diluted
|
100,170,954
|
|
|
96,901,909
|
|
|
3.4
|
%
|
|
100,177,767
|
|
|
—
|
|
AllianceBernstein
L.P.
|
|
|
|
ASSETS UNDER
MANAGEMENT | June 30, 2021
|
|
|
|
($
Billions)
|
|
|
|
Ending and
Average
|
Three Months
Ended
|
|
|
6/30/21
|
|
6/30/20
|
|
Ending Assets Under
Management
|
$738.4
|
|
$600.0
|
|
Average Assets Under
Management
|
$722.6
|
|
$578.5
|
Three-Month
Changes By Distribution Channel
|
|
|
|
|
|
|
|
|
|
Institutions
|
|
Retail
|
|
Private Wealth
Management
|
|
Total
|
|
Beginning of
Period
|
$
|
314.7
|
|
|
$
|
272.3
|
|
|
$
|
110.2
|
|
|
$
|
697.2
|
|
|
Sales/New
accounts
|
17.6
|
|
|
23.8
|
|
|
3.6
|
|
|
45.0
|
|
|
Redemption/Terminations
|
(13.7)
|
|
|
(15.3)
|
|
|
(3.4)
|
|
|
(32.4)
|
|
|
Net Cash
Flows
|
(3.0)
|
|
|
(3.3)
|
|
|
(0.1)
|
|
|
(6.4)
|
|
|
Net
Flows
|
0.9
|
|
|
5.2
|
|
|
0.1
|
|
|
6.2
|
|
|
Transfers
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Investment
Performance
|
13.5
|
|
|
16.2
|
|
|
5.3
|
|
|
35.0
|
|
|
End of
Period
|
$
|
329.1
|
|
|
$
|
293.7
|
|
|
$
|
115.6
|
|
|
$
|
738.4
|
|
Three-Month
Changes By Investment Service
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
Active
|
|
Equity
Passive(1)
|
|
Fixed
Income
Taxable
|
|
Fixed
Income
Tax-
Exempt
|
|
Fixed
Income
Passive(1)
|
|
Alternatives/
Multi-Asset
Solutions(2)
|
|
Total
|
|
Beginning of
Period
|
$
|
231.8
|
|
|
$
|
66.3
|
|
|
$
|
252.2
|
|
|
$
|
51.8
|
|
|
$
|
8.3
|
|
|
$
|
86.8
|
|
|
$
|
697.2
|
|
|
Sales/New
accounts
|
18.3
|
|
|
0.4
|
|
|
16.3
|
|
|
3.2
|
|
|
0.8
|
|
|
6.0
|
|
|
45.0
|
|
|
Redemption/Terminations
|
(9.8)
|
|
|
(0.3)
|
|
|
(19.9)
|
|
|
(1.7)
|
|
|
(0.1)
|
|
|
(0.6)
|
|
|
(32.4)
|
|
|
Net Cash
Flows
|
(2.9)
|
|
|
(1.8)
|
|
|
(1.7)
|
|
|
—
|
|
|
0.2
|
|
|
(0.2)
|
|
|
(6.4)
|
|
|
Net
Flows
|
5.6
|
|
|
(1.7)
|
|
|
(5.3)
|
|
|
1.5
|
|
|
0.9
|
|
|
5.2
|
|
|
6.2
|
|
|
Investment
Performance
|
19.3
|
|
|
4.9
|
|
|
5.4
|
|
|
0.7
|
|
|
0.1
|
|
|
4.6
|
|
|
35.0
|
|
|
End of
Period
|
$
|
256.7
|
|
|
$
|
69.5
|
|
|
$
|
252.3
|
|
|
$
|
54.0
|
|
|
$
|
9.3
|
|
|
$
|
96.6
|
|
|
$
|
738.4
|
|
Three-Month Net
Flows By Investment Service (Active versus Passive)
|
|
|
Actively
Managed
|
|
Passively
Managed (1)
|
|
Total
|
|
Equity
|
$
|
5.6
|
|
|
(1.7)
|
|
|
$
|
3.9
|
|
|
Fixed
Income
|
(3.8)
|
|
|
0.9
|
|
|
(2.9)
|
|
|
Alternatives/Multi-Asset Solutions
(2)
|
4.9
|
|
|
0.3
|
|
|
5.2
|
|
|
Total
|
$
|
6.7
|
|
|
$
|
(0.5)
|
|
|
$
|
6.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes index and enhanced index
services.
|
(2) Includes certain multi-asset
solutions and services not included in equity or fixed income
services.
|
By Client
Domicile
|
|
|
|
|
|
|
|
|
|
Institutions
|
|
Retail
|
|
Private
Wealth
|
|
Total
|
|
U.S.
Clients
|
$
|
225.2
|
|
|
$
|
164.5
|
|
|
$
|
113.0
|
|
|
$
|
502.7
|
|
|
Non-U.S.
Clients
|
103.9
|
|
|
129.2
|
|
|
2.6
|
|
|
235.7
|
|
|
Total
|
$
|
329.1
|
|
|
$
|
293.7
|
|
|
$
|
115.6
|
|
|
$
|
738.4
|
|
AB
L.P.
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
GAAP FINANCIAL RESULTS TO ADJUSTED FINANCIAL RESULTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
(US $ Thousands,
unaudited)
|
|
6/30/2021
|
|
3/31/2021
|
|
12/31/2020
|
|
9/30/2020
|
|
6/30/2020
|
|
3/31/2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenues, GAAP
basis
|
|
$
|
1,076,822
|
|
|
$
|
1,007,266
|
|
|
$
|
1,062,892
|
|
|
$
|
900,038
|
|
|
$
|
871,449
|
|
|
$
|
874,156
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution-related
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution
revenues
|
(155,538)
|
|
|
(147,600)
|
|
|
(143,131)
|
|
|
(135,693)
|
|
|
(120,099)
|
|
|
(130,857)
|
|
|
Investment advisory
services fees
|
(20,459)
|
|
|
(22,553)
|
|
|
(19,722)
|
|
|
(20,120)
|
|
|
(12,202)
|
|
|
(14,814)
|
|
|
Pass through
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory
services fees
|
(4,403)
|
|
|
(4,196)
|
|
|
(3,999)
|
|
|
(3,888)
|
|
|
(3,331)
|
|
|
(7,062)
|
|
|
Other
revenues
|
(8,229)
|
|
|
(10,531)
|
|
|
(10,187)
|
|
|
(9,344)
|
|
|
(10,195)
|
|
|
(9,607)
|
|
|
Impact of
consolidated company-sponsored investment funds
|
(4,286)
|
|
|
(311)
|
|
|
(864)
|
|
|
(765)
|
|
|
(21,552)
|
|
|
24,135
|
|
|
Long-term incentive
compensation-related investment (gains) losses
|
(2,201)
|
|
|
(2,012)
|
|
|
(4,270)
|
|
|
(3,140)
|
|
|
(5,257)
|
|
|
7,099
|
|
|
Long-term incentive
compensation-related dividends and interest
|
(71)
|
|
|
(85)
|
|
|
(918)
|
|
|
(91)
|
|
|
(88)
|
|
|
(106)
|
|
|
Write-down of
investment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
859
|
|
Adjusted Net
Revenues
|
|
$
|
881,635
|
|
|
$
|
819,978
|
|
|
$
|
879,801
|
|
|
$
|
726,997
|
|
|
$
|
698,725
|
|
|
$
|
743,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income,
GAAP basis
|
|
$
|
283,623
|
|
|
$
|
260,584
|
|
|
$
|
302,420
|
|
|
$
|
217,146
|
|
|
$
|
209,647
|
|
|
$
|
178,223
|
|
|
Exclude:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real
estate
|
(985)
|
|
|
(985)
|
|
|
(985)
|
|
|
(985)
|
|
|
5,188
|
|
|
(339)
|
|
|
Long-term incentive
compensation-related items
|
(91)
|
|
|
6
|
|
|
(337)
|
|
|
(416)
|
|
|
104
|
|
|
566
|
|
|
CEO's EQH award
compensation
|
17
|
|
|
142
|
|
|
205
|
|
|
205
|
|
|
209
|
|
|
184
|
|
|
Write-down of
investment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
859
|
|
|
Acquisition-related
expenses
|
180
|
|
|
22
|
|
|
1,614
|
|
|
356
|
|
|
805
|
|
|
526
|
|
|
Contingent payment
arrangements
|
—
|
|
|
—
|
|
|
(1,366)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Sub-total of non-GAAP
adjustments
|
|
(879)
|
|
|
(815)
|
|
|
(869)
|
|
|
(840)
|
|
|
6,306
|
|
|
1,796
|
|
|
Less: Net (loss)
income of consolidated entities attributable to non-controlling
interests
|
3,573
|
|
|
(292)
|
|
|
381
|
|
|
81
|
|
|
20,940
|
|
|
(25,571)
|
|
Adjusted Operating
Income
|
$
|
279,171
|
|
|
$
|
260,061
|
|
|
$
|
301,170
|
|
|
$
|
216,225
|
|
|
$
|
195,013
|
|
|
$
|
205,590
|
|
Operating Margin,
GAAP basis excl. non-controlling interests
|
26.0
|
%
|
|
25.9
|
%
|
|
28.4
|
%
|
|
24.1
|
%
|
|
21.7
|
%
|
|
23.3
|
%
|
Adjusted Operating
Margin
|
31.7
|
%
|
|
31.7
|
%
|
|
34.2
|
%
|
|
29.7
|
%
|
|
27.9
|
%
|
|
27.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AB Holding
L.P.
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
GAAP EPU TO ADJUSTED EPU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
($ Thousands except
per Unit amounts, unaudited)
|
6/30/2021
|
|
3/31/2021
|
|
12/31/2020
|
|
9/30/2020
|
|
6/30/2020
|
|
3/31/2020
|
Net Income -
Diluted, GAAP basis
|
$
|
90,925
|
|
|
$
|
81,105
|
|
|
$
|
93,221
|
|
|
$
|
67,013
|
|
|
$
|
56,929
|
|
|
$
|
62,274
|
|
Impact on net income
of AB non-GAAP adjustments
|
(248)
|
|
|
(289)
|
|
|
(282)
|
|
|
(289)
|
|
|
2,533
|
|
|
326
|
|
Adjusted Net
Income - Diluted
|
$
|
90,677
|
|
|
$
|
80,816
|
|
|
$
|
92,939
|
|
|
$
|
66,724
|
|
|
$
|
59,462
|
|
|
$
|
62,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Net Income
per Holding Unit, GAAP basis
|
$
|
0.91
|
|
|
$
|
0.81
|
|
|
$
|
0.97
|
|
|
$
|
0.70
|
|
|
$
|
0.59
|
|
|
$
|
0.63
|
|
Impact of AB non-GAAP
adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01)
|
|
|
0.02
|
|
|
0.01
|
|
Adjusted Diluted
Net Income per Holding Unit
|
$
|
0.91
|
|
|
$
|
0.81
|
|
|
$
|
0.97
|
|
|
$
|
0.69
|
|
|
$
|
0.61
|
|
|
$
|
0.64
|
|
AB
Notes to Consolidated Statements of
Income and Supplemental Information
(Unaudited)
Adjusted Net Revenues
Net Revenue, as adjusted, is reduced to exclude all of the
company's distribution revenues, which are recorded as a separate
line item on the consolidated statement of income, as well as a
portion of investment advisory services fees received that is used
to pay distribution and servicing costs. For certain products,
based on the distinct arrangements, certain distribution fees are
collected by us and passed through to third-party client
intermediaries, while for certain other products, we collect
investment advisory services fees and a portion is passed through
to third-party client intermediaries. In both arrangements, the
third-party client intermediary owns the relationship with the
client and is responsible for performing services and distributing
the product to the client on our behalf. We believe offsetting
distribution revenues and certain investment advisory services fees
is useful for our investors and other users of our financial
statements because such presentation appropriately reflects the
nature of these costs as pass-through payments to third parties
that perform functions on behalf of our sponsored mutual funds
and/or shareholders of these funds. Distribution-related
adjustments fluctuate each period based on the type of investment
products sold, as well as the average AUM over the period. Also, we
adjust distribution revenues for the amortization of deferred sales
commissions as these costs, over time, will offset such
revenues.
We adjust investment advisory and services fees and other
revenues for pass through costs, primarily related to our transfer
agent and shareholder servicing fees. These fees do not affect
operating income, but they do affect our operating margin. As such,
we exclude these fees from adjusted net revenues.
We adjust for the revenue impact of consolidating
company-sponsored investment funds by eliminating the consolidated
company-sponsored investment funds' revenues and including AB's
fees from such consolidated company-sponsored investment funds and
AB's investment gains and losses on its investments in such
consolidated company-sponsored investment funds that were
eliminated in consolidation.
Also, adjusted net revenues exclude investment gains and losses
and dividends and interest on employee long-term incentive
compensation-related investments.
Lastly, during the first quarter of 2020, we wrote-down an
investment that had been received in exchange for the sale of
software technology; the write-down brought the investment balance
to zero. Previously, we had been excluding the value of this
investment from adjusted net revenues.
Adjusted Operating Income
Adjusted operating income represents operating income on a US
GAAP basis excluding (1) real estate charges (credits), (2) the
impact on net revenues and compensation expense of the investment
gains and losses (as well as the dividends and interest) associated
with employee long-term incentive compensation-related investments,
(3) our CEO's EQH award compensation, as discussed below,
(4) the write-down of an investment, (5) acquisition-related
expenses, (6) adjustments to contingent payment arrangements, and
(7) the impact of consolidated company-sponsored investment
funds.
Real estate charges (credits) incurred have been excluded
because they are not considered part of our core operating results
when comparing financial results from period to period and to
industry peers. Real estate charge (credits) incurred during the
fourth quarter of 2019 through the fourth quarter of 2020, while
excluded in the period in which the charges (credits) were
recorded, are included ratably over the remaining applicable lease
term.
Prior to 2009, a significant portion of employee compensation
was in the form of long-term incentive compensation awards that
were notionally invested in AB investment services and generally
vested over a period of four years. AB economically hedged the
exposure to market movements by purchasing and holding these
investments on its balance sheet. All such investments had vested
as of year-end 2012 and the investments have been delivered to the
participants, except for those investments with respect to which
the participant elected a long-term deferral. Fluctuation in the
value of these investments is recorded within investment gains and
losses on the income statement. Management believes it is useful to
reflect the offset achieved from economically hedging the market
exposure of these investments in the calculation of adjusted
operating income and adjusted operating margin. The non-GAAP
measures exclude gains and losses and dividends and interest on
employee long-term incentive compensation-related investments
included in revenues and compensation expense.
The board of directors of EQH granted to Seth P. Bernstein ("CEO") equity awards in
connection with EQH's IPO and Mr. Bernstein's membership on the EQH
Management Committee. Mr. Bernstein may receive additional equity
or cash compensation from EQH in the future related to his service
on the Management Committee. Any awards granted to Mr. Bernstein by
EQH are recorded as compensation expense in AB's consolidated
statement of income. The compensation expense associated with these
awards has been excluded from our non-GAAP measures because they
are non-cash and are based upon EQH's, and not AB's, financial
performance.
The write-down of the investment in the first quarter of 2020
has been excluded due to its non-recurring nature and because it is
not part of our core operating results.
Acquisition-related expenses have been excluded because they are
not considered part of our core operating results when comparing
financial results from period to period and to industry peers.
The recording of changes in estimates of contingent
consideration payable with respect to contingent payment
arrangements associated with our acquisitions are not considered
part of our core operating results and, accordingly, have been
excluded.
We adjusted for the operating income impact of consolidating
certain company-sponsored investment funds by eliminating the
consolidated company-sponsored funds' revenues and expenses and
including AB's revenues and expenses that were eliminated in
consolidation. We also excluded the limited partner interests we do
not own.
Adjusted Operating Margin
Adjusted operating margin allows us to monitor our financial
performance and efficiency from period to period without the
volatility noted above in our discussion of adjusted operating
income and to compare our performance to industry peers on a
basis that better reflects our performance in our core business.
Adjusted operating margin is derived by dividing adjusted operating
income by adjusted net revenues.
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SOURCE AllianceBernstein